What is a Section 20 Notice for Major Works

A Section 20 Notice is a required procedure when a landlord wishes to carry out major works on a building. The landlord must serve a Section 20 Notice (the “Notice”) if the cost of the works that the landlord would like to carry out will exceed £250 for any one of the building’s leaseholders. Such works may involve significant repairs to the building or planned maintenance works.

It is required under Section 20 of the Landlord and Tenant Act 1985 that the landlord must consult with the leaseholders, and any of their sub-tenants, about the works and the costs that it will involve. This consultation must follow the procedural requirements of Section 20 of the Landlord and Tenant Act 1985.

A landlord’s failure to follow the correct procedure for consultation under Section 20 may lead to the landlord only being able to recover a small proportion of the actual costs of the major works undertaken from the leaseholders. These costs may be capped at just £250 per Leaseholder.

What should a Section 20 Notice include?

The landlord must carry out the required consultation in three stages. This involves:

Stage 1: Notice of Intention. The landlord must inform you of the work they intend to do and the reasons for it. This stage should include:

• A description of the proposed works and the estimated costs involved.
• An invitation for leaseholders to submit observations within 30-day period about the proposed works.
• An opportunity for leaseholders to propose a contractor for the works.

The Notice of Intention must provide 30 days for the leaseholders to provide their observations before progressing to the next stage of consultation.

Stage 2: Notice of Estimates. In this stage, the landlord provides leaseholders with detailed estimates for the proposed works. This includes:

• At least two estimates from two different contractors. One of these quotes must be from a contractor who is not associated with the landlord in any way.
• Further details of the proposed works based on the quotes that have been obtained.
• A summary of leaseholder’s submitted observations from Stage 1 of the consultation.

The landlord must then allow another period of at least 30 days for the leaseholders to submit further observations in light of the estimates provided.

Stage 3: Notice of Who Has Won the Contract. This stage is required if the landlord has not chosen the contractor with the lowest estimate available. If this has occurred, the landlord must inform the leaseholders of the reasons for their choice.

Once these stages have been successfully followed and completed, the landlord will then be able to proceed with the proposed works. The landlord will be able to recover the costs of the works from the leaseholders as stated in their leases.

Leaseholders’ Rights Under Section 20

The Section 20 process provides the leaseholders specific rights throughout the consultation process. It is important that leaseholders participate in the process as it can significantly influence the outcome of the proposal and ensure that the works carried out are cost-effective for all parties.

Leaseholders have the following rights under the Section 20 process:

1. Submitting Observations
   • As mentioned above, leaseholders can submit their observations or concerns during Stage One and Stage Two of the consultation process.
2. Inspecting Estimates
   • Leaseholders can request to inspect estimates and other relevant documents to the proposed works during Stages One and Two.
3. Challenging Costs
   • If the Leaseholders believe that the costs involved are unreasonable, they may be able to challenge the charges through the First-Tier Tribunal (Property Chamber).
   • Grounds for such a challenge may include the necessity of works, the quality of the estimates, or the selection process of the contractor.
4. Collective Action
   • Leaseholders can collectively suggest contractors or make group observations to influence the decision-making process of the Landlord.
5. Right to Information
   • Leaseholders have the right to detailed information about the proposed works, the estimated costs and the Landlord’s decision-making process.

Conclusion

The Section 20 process is designed to ensure transparency and fairness when landlords undertake major works. For leaseholders, active participation in the consultation process is essential to safeguard their interests and ensure cost-effective solutions. By understanding their rights and responsibilities, leaseholders can make informed decisions and hold landlords accountable throughout the process.

How we can help

If you have a property dispute or require any assistance on any of these issues, please contact our Dispute Resolution team at disputeresolution@tvedwards.com or call 0203 440 8000.